State pension set for mega-boost with payments tipped to rise by up to £848

With inflation still far higher than the Government would wish, it means that retirees could be in line for a £848 a year uptick in the money paid out to them.

The pension rate for the 2024-25 financial year will be determined in September.

Inflation currently sits at 8.7 per cent and has remained stubborn so far this year, dropping far more slowly than economists and the Government predicted.

If it remains close to the current rate in just three months time, it would mean those in receipt of the New State Pension would receive the £848 extra cash, giving them £11,448 a year in payment.

Even if inflation drops to six per cent it would still drive a £636 increase.

The top up comes after a record rise in the state pension for the 2023-24 financial year.

Payments rose by almost £1,000 due to 10.1 per cent inflation rate.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: "State Pension costs are surging with the UK Government predicting eye-watering increases over the next five years.

"Around 12.6 million people are claiming the State Pension with this number expected to surge past 13 million in just five years, all thanks to the fact we are living longer.

"This is great news but undoubtedly puts real pressure on the smaller working population who shoulder the cost."

She added the anticipated large increase for a second year in a row would likely lead to the Triple Lock pension pledge being scrapped after the next election.

Morrissey explained: "Brought in over a decade ago to make sure pensioners received decent State Pension increases, the Triple Lock has also been criticised in recent years for being inter-generationally unfair.

"The time has come for a review of the State Pension and the Triple Lock’s role within it to make sure it remains fit for purpose."